Adrian Reid says AI trading bots fail private traders because they chase one- to five-minute charts where noise and costs kill any edge. He recommends switching to daily or weekly timeframes instead, where real economic events play out and individual traders can actually capture trends.
Look, theoretically the, the idea sounds great, right? You have an AI, it's plugged into the markets, it knows all the information, it can make the right decision. But the challenge is, will it really make the right decision and can the markets really be predicted? And what happens is markets evolve gradually over time, but there's still, there's still human emotion in there, there's still economic trends, there's still fundamental shifts in the marketplace, there's still companies going out of business, there's still companies taking over. There still real things happening in the world. And these real things typically play out over longer time frames. And what I've seen at least is a lot of the technology is focused on really short term trading. You know, one minute charts, five minute charts, buying and selling really quickly, trying to outsmart everyone in the blink of an eye. The challenge is at the very short term end of the market, there's a lot of noise, there's a lot of uncertainty, the trading costs are very high and the profits that are made by data vendors and brokers are also very high. So a lot of these AI agents that are trading very short term and machine learning and everything are all focus on very short term algorithms. It's actually very hard to make money long term at the short term end like that. For the private trader people like us, it's much easier to step back and go to a longer time frame. Daily charts, weekly charts even, or weekly systems on daily charts and trade longer term systems. When I say system, it really is an algo. It's the same as the short term one. They're just different rules. But on a longer term time horizon, the impact of things like machine learning and high frequency trading and AI is I think, slower to impact. So we still have a place, and I think for many years we'll still have a place. I don't think the AI bots are taking over anytime soon. The marketing will tell you otherwise. There'll be many claims saying this is the best AI trading in the world, but really there's no free money, right? If there is an edge, it'll get very quickly eroded because there's huge competition in that space, a lot of capital invested. But for us as individual traders, it's a matter of stepping back, trading a longer time frame above the noise, so that we can still capture the big trends and the really significant moves in the market and, and we can still benefit.
